But Don't Toss the Privacy Notices

By July of 2001, the financial institutions with which you do business were required by U.S. Federal law (see Chapter 18, “Can You Really Be Anonymous?”) to send you a notice about your privacy rights and choices. The Congress passed the Financial Services Modernization Act, giving banks the ability to diversify (own more kinds of businesses) than was previously possible. In addition, because the Congress believed that financial privacy is an important shared value in the United States, and that it deserves protection, they addressed the sharing of personal financial information among these companies that are now enabled to work together.

The law gave the enforcement of the privacy protection to the Federal Trade Commission, which then made rules that now apply. One part of the rule said that financial institutions (now defined as organizations that lend, safeguard, exchange, manage, and insure money for consumers or their representatives) must give their customers the ability to say “Do not share my information” with third parties. Of course, there are exceptions to this broad statement of the rule, but mainly banks and their affiliates—credit card companies, insurance companies, mortgage lenders—now need to send you a privacy notice and tell you how to communicate your wishes to them.